LOS ANGELES (CBSLA) – Lakers legend and business mogul Magic Johnson announced Monday that he will provide $100 million in loans to minority-owned businesses struggling amid the coronavirus pandemic.
Johnson reported that his Equitrust Life Insurance Company, which he owns through his company Magic Johnson Enterprises, will provide $100 million in capital for loans through the Small Business Administration’s Paycheck Protection Program (PPP).
Equitrust will team up with MBE Capital Partners, a non-bank lender which specializes in providing financing to minority and female-owned businesses, according to the Wall Street Journal. The money will immediately go towards 5,000 PPP loans which the SBA has already approved.
“I’m excited to announce that my company Equitrust will be partnering with MBE Capital Partners to deploy $100M in PPP loans to minority-owned businesses!” Magic tweeted Monday.
The PPP program has faced serious criticism over allegations that large companies were able to obtain loans while small businesses fell through the cracks.
Nowhere was this better highlighted than by the news that Magic’s former team, the Lakers – one of the richest sports franchises in the world – somehow obtained a $4.6 million in PPP money last month.
The Lakers later returned the money.
“We knew why the money was gone and couldn’t trickle down to small businesses, especially small minority businesses, because they didn’t have those great relationships with the banks,” Johnson told WSJ. “So this was easy for us to understand.”
The $349 billion PPP program money – which was approved as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES) earlier this month — dried up so quickly that Congress was forced to pass a second relief package in April which includes another $310 billion.